Problem 23-4A |
|
Singh Company prepares monthly cash budgets. Relevant data from operating budgets for 2013 are:
January |
February |
|||
Sales |
$350,000 |
$400,000 |
||
Direct materials purchases |
110,000 |
130,000 |
||
Direct labor |
90,000 |
100,000 |
||
Manufacturing overhead |
70,000 |
75,000 |
||
Selling and administrative expenses |
79,000 |
86,000 |
All sales are on account. Collections are expected to be 50% in the month
of sale, 30% in the first month following the sale, and 20% in the
second month following the sale. Sixty percent (60%) of direct materials
purchases are paid in cash in the month of purchase, and the balance due is
paid in the month following the purchase. All other items above are paid in the
month incurred except for selling and administrative expenses that include
$1,000 of depreciation per month.
Other data:
1. |
Credit sales: November 2012, $260,000; December 2012, $320,000. |
|
2. |
Purchases of direct materials: December 2012, $100,000. |
|
3. |
Other receipts: January—Collection of December 31, 2012, notes receivable $15,000; February—Proceeds from sale of securities $6,000. |
|
4. |
Other disbursements: February—Withdrawal of $5,000 cash for personal use of owner, Dwight Yocum. |
The company’s cash balance on January 1, 2013, is expected to be $60,000. The
company wants to maintain a minimum cash balance of $50,000.
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases.
Prepare a cash budget for January and February in columnar form. (If answer is 0 then please enter 0. Do not leave any fields blank.)
CLICK HERE TO GET THE ANSWER !!!!
No comments:
Post a Comment